11 November 2011
INTERIM MANAGEMENT STATEMENT
British Polythene Industries PLC issues today the following Interim Management Statement in respect of the period to 31 October 2011.
We indicated at the time of our Interim Statement on 30 August that we anticipated delivering satisfactory results for the remainder of 2011. This remains the case and we can now confirm that the outcome for the third quarter was fully up to our expectations.
We further indicated that volumes had been disappointing during the summer months and, with the exception of silage stretchwrap, this pattern continued through this third quarter. Unseasonably wet weather during the summer and autumn, particularly in mainland Europe, has assisted in growing sales of silage stretchwrap some 5% this year, but at the expense of laying down stocks for the 2012 season.
The growth in silage stretchwrap offset weakness elsewhere leaving our overall volumes flat.
The easing in polymer input costs continues, with proposed increases announced monthly by our suppliers finally resulting in minor decreases in price; a process that is not conducive to credibility with customers. This easing of input costs, combined with lower phasing of our capital expenditure and current generation of cash from retained profits, has resulted in a welcome reduction in the level of our borrowings which we now expect to be below previous expectations for the year end.
We announced on 27 September that the European Commission had closed its enquiry into the agricultural film market. This followed the decision in August by the Office of Fair Trading that it had closed its separate enquiry into the same market.
On 1 November we announced our intention to close our factory at Swansea with the likely loss of up to 49 jobs. The financial performance of this site has been poor for several years and, despite recent investment and a change in direction, disappointing volumes have resulted in escalating losses. It is anticipated that the volumes currently manufactured at Swansea will be transferred to other Group sites within the UK.
The anticipated reorganisation costs of £1.3m associated with this closure will be offset against the reorganisation gains on property sales during the first half of the year.
Our current expectation for the remainder of the year is a continuation of the pattern of the third quarter but without the benefit of sales of silage stretchwrap. Business will continue to be very challenging and we do not anticipate any improvement in demand. However, with the changes we have made in the structure of our business, we believe that we have the ability to continue producing good results in these difficult times.
Enquiries:
Cameron McLatchie, Chairman | British Polythene Industries PLC | 01475 501000 |
John Langlands, Chief Executive | British Polythene Industries PLC | 01475 501000 |
Tim Spratt/Clare Thomas | FTI Consulting | 0207 831 3113 |
